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Wednesday, March 23, 2016

Bill Mitchell — Chaos in Europe and the flawed monetary system

I spend a fair bit of time in various airports each month and hate the onerous security checks, which at times seem petty in the extreme. It always amused (not the right word) me that a passenger could just walk straight on with a bag full of duty free whisky which would make a lethal weapon if smashed, yet characters like me with pins in my legs (old bike crashes) have to nearly strip each time we have to fly. Now I suppose they will have security screening outside the terminal entrance just to enter. The authorities would have been better ensuring that their youth had access to employment rather than allowing them to wallow in unemployment and the resulting social exclusion. It is too simplistic to attribute the growing dangers in Europe and elsewhere to concentrations of high unemployment. But if a society deliberately denies a particular generation of the chance to gain employment and, instead, vilifies them as lazy, wanton individuals then it is easy to see why those characters will conclude that society has nothing to offer. In Europe where these manifestations are becoming increasingly obvious, the flawed monetary system is at the heart of the problem. It has failed categorically and the fall out of that failure is multi-dimensional.…

8 comments:

"If a society deliberately denies a particular generation of the chance to gain employment and, instead, vilifies them as lazy, wanton individuals then it is easy to see why those characters will conclude that society has nothing to offer.

People who are treated coldly and meanly may become cold and mean themselves.

Bill blames the monetary system. I think the monetary system is just a symptom. The real sickness is our society.

This subject ties in with the post about Eric Fromm a couple weeks back.

One of Fromm's points was that each type of economy results in certain types of predominant attitudes and values. A laissez faire capitalist society will result in widespread feelings of insecurity, a belief in "just desserts", and a belief that people should compete with each other instead of cooperate. If you believe in the capitalist market, as those of us who grew up in the cold war were brainwashed to believe, then people who are punished by the market deserve to be punished, and people who are rewarded by the market deserve to be rewarded. Insecurity in a capitalist economy is viewed as a good thing, necessary to keep people motivated. To deny this is to admit that the market economy is a lie.

If you instead believe that everyone deserves to be economically secure and enjoy some minimum standard of living, have a "right" to work, etc., look out for each other, then your beliefs are at odds with capitalism.

Like Keynesian economics, MMT is an attempt to save capitalism from itself by applying a bandaid to some of the problems. Yet this supposes a change in values that is at odds with the values of capitalism. Hence I am skeptical that MMT is socially and politically feasible. The Nordic states have successfully combined capitalism with a socialist welfare state, but it remains to be seen if the Nordic system can succeed in less cohesive societies, or if it can even be sustained in the Nordic states, which are under pressure from Euro-imposed austerity and from immigration.

If one has humanistic values then the logical thing is to turn to socialism rather than bandaids for capitalism. Add climate change and stir.

Dan: "Like Keynesian economics, MMT is an attempt to save capitalism from itself by applying a bandaid to some of the problems."

That may well turn out to be true, but it may also be true that MMT policies may turn out to be a bandaid big enough to heal many of the worst internal contradictions. That's not to say a socialism with access to the productive forces available today won't have its own huge problems. That is the human condition. Anyway, are enough people willing to accept socialism? I think that's a long way off.

I like Neil's description of putting capitalism in a strong enough box that it can't reap the mayhem it has. Let's push the institutions as far as they can go. If revolution is what's finally required, so be it. In the meantime, let's see how far we can get within the existing structures - the type of social democracy that puts the Nordic countries to shame. That was achieved semi-peacefully.

There is no reason why it can't be achieved elsewhere. Some countries will have a tougher time, others an easier time. Greece, Spain, Italy, Austria and Belgium will have to deal with some thoroughly nasty rightwing groups (neofascist), the UK and the US will have to deal with the power of organised finance. Americans will have to figure out a way of dealing with the Pentagon economy and the powers associated with it. That's a big ask. In fact, that's a damn frightening ask! But then there is nothing as powerful as an idea whose time has come, and it's unlikely that the US military will mow down millions of protestors because they want a job, healthcare, free education and good social security. But then again the powers that be may yet find a convincing way of pitting Americans against each other or against others instead: it's not Wall Street, it's not the permanent war economy, it's not the corporate racket; it's the illegal immigrants, it's the Spanish speaking immigrants, it's the Chinese...